Titelei.indd II 03.08.2010 12:44:46 Uhr Zum Inhalt: „Marketing –A Relationship Perspective“ is a comprehensive and clear principles text which describes and analyses the fundamental concepts of contemporary marketing. It integrates the ‚new‘ relationship approach into the traditional process of developing effective marketing plans. The book‘s structure fits to the marketing planning process of a company. Consequently, the book looks at the marketing management process from the perspective of both relational and transactional approach suggesting that a company should in any case pursue an integrative and situational marketing management approach. Svend Hollensen‘s and Marc Opresnik‘s holistic approach covers both principles and practices, is drawn in equal measure from research and application, and is an ideal text for students, researchers and practitioners alike. “This book is an excellent foundation text and an ideal basis for a marketing course of one semester. The authors write in a lively style with a great deal of up-to-date examples. The well-researched and innovative content brings marketing theory to life.“ (Neil Selby, International Director, Oxford University‘s Saïd Business School) „The dynamic and global competitive landscape requires marketing professionals who have athorough knowledge of marketing principles coupled with strong creative skills. The book provides excellent coverage of these principles and serves as a great resource for marketing students and young professionals everywhere.“ (Dr Paul Stone, Vice President Retail Strategy & Portfolio, Shell Int. Petroleum Co. Ltd.) „This is an exciting textbook that provides a concise introduction to the theory and practice of Marketing in the 21st century. Perfectly suited to students of one semester marketing courses, this invaluable source of knowledge presents a solid grounding in the fundamentals of contemporary marketing.“ (Professor Jürgen Lürssen, Professor of Marketing, Leuphana Universität Lüneburg, Germany) Zu den Autoren: Prof. Svend Hollensen, Ph.D., University of Southern Denmark. Prof. Marc Oliver Opresnik, Ph.D., Fachhochschule Lübeck. Marketing A Relationship Perspective von Prof. Svend Hollensen, Ph.D., University of Southern Denmark und Prof. Marc Oliver Opresnik, Ph.D., Fachhochschule Lübeck Verlag Franz Vahlen München Titelei.indd III 03.08.2010 12:44:46 Uhr Preface V Preface The development of marketing theory and practice is undergoing a paradigm shift from a transactional to a relationship orientation. As many companies are still relying on the traditional marketing approach, this book will bridge the gap between relationship marketing (RM) and traditional (transactional) marketing (TM). In the traditional transactional approach, marketing management is about planning, coordinating and controlling marketing strategies that are aimed at satisfying customer needs and desires – and receiving money from sales. In recent years, marketing has been undergoing considerable self-examination and internal debate. The overriding emphasis in the ‘traditional’ marketing approach is on acquiring as many customers as possible. Evidence is mounting, however, that traditional marketing is becoming too expensive and is less effective given changes in the micro and macro environment of companies. Many leading marketing academics and practitioners have concluded that many of the long-standing practices and operating modes in marketing need to be re-modelled, and we need to move towards an integrated relationship approach that is based on repeated market transactions and mutual sustainable gain for buyers and sellers. The ‘new paradigm’ is commonly referred to as relationship marketing (RM). However, relationship marketing is not a new concept. Before the advent of mass production and mass media, relationship marketing was the norm; sellers usually had first-hand knowledge of buyers, and the successful ones used this knowledge to help keep customers for life. Relationship marketing reflects a strategy and process that integrate customers, suppliers, and other partners into the company’s design, development, manufacturing, and sales processes. Fundamentally, relationship marketing draws from traditional marketing principles. Marketing can be defined as the process of identifying and satisfying customers’ needs in a competitively superior manner in order to achieve the organisation’s objectives. Relationship marketing builds on this. The customer is still fundamental to a marketing relationship. Marketing exists to efficiently meet the satisfaction of customer needs, as well as those of the marketing organisation. There is a considerable body of knowledge in social sciences that sheds light on the many facets of human relationships. We draw from these sources to further our understanding of consumer relationships. Marketing exchange seeks to achieve satisfaction for the consumer and the marketing organisation (or company). In this latter group we include employees, shareholders, and managers. Other stakeholders (like competitors, financial and governmental institutions) are also important. As we shall see later relationships can cover a wide range of organisations in the environment e.g. governmental institutions, industry associations, European Union (EU) institutions etc. However, the main focus of this book is still on the relationships between the firm and its closest external bodies, primarily the customers. Titelei.indd V 03.08.2010 12:44:46 Uhr PrefaceVI In the transactional approach, participants focus exclusively on the economic benefits of the exchange. Even though in relational exchange the focus widens, economic benefits remain important to all of the partners in marketing relationships. With the relationship approach in mind, an integrated view of marketing management will be presented. To do this, the latest research findings in marketing management and related disciplines are summarized. Yet, marketing management is still a very practical discipline. People still have practical needs, firms still face practical problems, and solutions still have to work in real life. Most marketers cannot and should not hide in labs. Marketing is a social science based on theories and concepts, but it also requires that most marketers meet with people, observe them, talk to them, and understand their activities. In essence, marketing is a dialogue between sellers (marketers) and buyers (customers). This book reflects this applied approach. Together with important concepts and theories, our experiences that have been obtained through work with numerous companies – large and small, domestic and international – for many years will be drawn on. Target Audience This book is written for people who want to know how the relationship and the traditional marketing approach (in combination) affect the development of effective and efficient marketing plans. This book is aimed primarily at students, MBA/graduate students and advanced undergraduates who wish to go into business. It will provide the information, perspectives, and tools necessary to get the job done. Our aim is to enable them to make better marketing decisions. A second audience for this book is the large group of practitioners who want to build on the existing skills and knowledge already possessed. The book is of special interest to the manager who wishes to keep abreast of the most recent developments in the ‘marketing management’ field. Unique Features of this Book This marketing text integrates the ‘new’ relationship approach in the traditional process of developing effective marketing plans. Compared to other marketing management books this text will attach more importance to the following themes: Buyer-Seller Relationships The guiding principle of this textbook is that of building relationships between buyers and sellers. Relationships is a growing trend and for good reason. Dramatic changes in the marketing environment are presenting immense new opportunities for companies that really build and retain relationships with customers. Relationship marketing emphasizes the tremendous importance of satisfied, loyal customers. Good customer relationships happen when all employees within the organisation develop the sensitivity and desire to satisfy customers’ needs and wants. It may be argued that the traditional concept of marketing does not adequately reflect the recognition of the long-term value of a customer. The argument is that many of the traditional definitions of marketing, although stressing the importance of customer needs and satisfaction, are essentially concerned with maximizing the profitability of each transaction. Instead they should seek to develop long-term relationships with customers, which cannot easily be duplicated by competitors. Titelei.indd VI 03.08.2010 12:44:46 Uhr Preface VII Buyer-Seller Interaction on a Global Scale Today’s companies are facing fierce and aggressive competition. Today most firms compete not only locally and nationally, but globally as well. Companies that have never given a thought to internationalization now also face competition in their home market from international companies. Thinking globally also requires an understanding of the international diversity in buying behaviour and the importance of cross-cultural differences, both in the B-t-C and B-t-B market. This cross-cultural approach is centred on the study of the interaction between buyers and sellers (and their companies) who have different national and/or cultural backgrounds. Creating Competitive Advantage through Relationships Together with other Companies Greater emphasis is given to the development of competitive advantage, and consequently to the development of resources and capabilities and competences within the organisation and with other companies. Relationship marketing seeks to build a chain of relationships (networks or value net) between the organisation and its main stakeholders, including customers, suppliers, distribution channel intermediaries, and firms producing complementary products and services. Relationships to competitors are also considered. Cross-Functionalism Marketing is not an isolated function. A marketer’s ability to effectively implement a strategic marketing program depends largely on the cooperation and competence of other functional areas within the organisation. Consequently, substantial attention is given to the inter-functional approach of marketing management. This includes: the concept of competitive advantages, cross-functional teams in the development of new products, supply chain management , internationalization, quality management, and ethics. Outline After outlining the fundamentals of relationship marketing in the first chapter, the book is based on the main phases involved in marketing management, i.e. the decision-making process regarding formulating, implementing, and controlling a marketing plan: Phase 1: Situational analysis in the Marketing Planning Process (Chapter 2)• Phase 2: Strategy formulation in the Marketing Planning Process (Chapter 3)• Phase 3: Marketing Mix in the Marketing Planning Process (Chapter 4)• Phase 4: Implementation and controlling in the Marketing Planning Process (Chap-• ter 5) The schematic outline of the book in Figure 1.1 shows how the four basic phases are divided into four chapters. Consequently, the book has a clear structure according to the marketing planning process of the firm (Figure 1.1): The introduction describes the fundamentals of relationship marketing including the evolution of the relationship marketing concept. After relationship marketing is defined and relationship economics and relationship drivers are explained the chapters concludes depicting relationship marketing as an integrative management process (Chapter 1). Based on an analysis of the internal and external marketing situation of a company and its relationships (Chapter 2), the firm is able to develop marketing strategies (Chapter 3) and marketing programs (Chapter 4). At the end of the planning process, the firm has to implement and control its Titelei.indd VII 03.08.2010 12:44:46 Uhr PrefaceVIII activity in the market and if necessary make changes in the marketing strategy (Chapter 5). Throughout the book this marketing planning process is seen in a relationship approach, as a supplement to the transactional approach. Against this background the development and management of customer relationships is explained in a separate section. Finally, the contemporary issues of ethical, social and environmental aspects of marketing planning are discussed in the last part of the book. Pedagogical/Learning Aids Many aids to student learning come with the book. These include: chapter learning objectives:• tell the reader what he/she should be able to do after completing each chapter. case studies:• there is one case study in each chapter, at the end are integrated. Each case study also contains questions. Table 1.1 lists the case studies. exhibits:• examples from the real world of the chapter to illustrate the text and the marketing models. There is one exhibit for each chapter. Table 1.2 lists these exhibits. summaries:• each chapter ends with a summary of the main concepts. discussion questions:• at the end of each chapter the discussion issues are presented as questions. Chapter 3: Strategy formulation in the marketing planning process ? Strategic Marketing Planning ? Market Segmentation, targeting and positioning Chapter 5: Implementation and controlling in the marketing planning process ? Organizing and implementing the marketing plan ? Budgeting and control ? Ethical, social and environmental aspects of relationship management ? Developing and managing customer relationships Chapter 4: Marketing Mix in the marketing planning process ? Product and service decisions ? Pricing decisions ? Distribution decisions ? Communication decisions Chapter 1: Fundamentals of relationship marketing ? The evolution of Relationship Marketing ? Definition of Relationship Marketing ? Relationship economics ? Relationship drivers ? Relationship Marketing as an integrative management process ? Fundamentals of marketing planning Chapter 2: Situational analysis in the marketing planning process ? Assessing the internal and external marketing situation ? Analyzing the buying behaviour in B2B and B2C markets ? Comparing B2B and B2C markets ? SWOT Analysis Phase 1 Analysis Phase 2 Th e m ar ke tin gp la nn in gp ro ce ss Strategy formulation Phase 3 Tactical decisions Phase 4 Implementation and control Where are we and which value are we offering? Which customers should we serve? How should we offer our value to these customers? How are we implementing and controlling that we are on course? Figure 1.1: Structure of ‘Marketing – a relationship perspective’ Titelei.indd VIII 03.08.2010 12:44:46 Uhr Preface IX In the development of this text a number of reviewers have been involved, whom we would like to thank for their important and valuable contribution. Especially, we would like to thank Mr. Neil Selby, Saïd Business School – University of Oxford, Professor Jürgen Lürssen, Leuphana Universität Lüneburg, Professor Jens-Mogens Holm, Europäische Fernhochschule Hamburg, University of Sothern Denmark, Fachhochschule Lübeck and Mr. Mathias Helms. We would also like to thank Klara Ondras˜ková and Ondrej (Dujek Mendel University in Brno, Czech Republic) for their contribution to Exhibit 4.1: Kofolo. One of our former students at Euro-FH in Hamburg, Nila Halter, shared her personal story with us about turning a product idea into a specific business. We thank her for the input to Exhibit 1.1: N’oats Porridge. We are grateful to our publisher Verlag Franz Vahlen. During the writing process we had the pleasure of working with editor Hermann Schenk, whom we thank for his encouragement and professionalism in transforming the manuscript into the final book. Chapters Case titles/subtitles Headquarters in following country/area Geographical target area in the case/ Target market (B-t-B, B-t-C or both) Ch. 1: Fundamentals of Relationship Marketing Case study: Nordex AG The German wind turbine manufacturer seeks new business opportunities in the world market Germany World B2B Ch. 2: Situational analysis in the Marketing Planning Process Case study: BMW Motorcycles The German motorbike company is evaluating their key competences Germany UK/World B2C Ch. 3: Strategy formulation in the Marketing Planning Process Case study: Royal Copenhagen Establishing relationships to International consumers with tableware Denmark Japan B2C (+ B2B) Ch. 4: Marketing mix in the Marketing Planning Process Case study: Heinrich Deichmann-Shuhe GmbH International expansion of the shoe retail chain Germany World B2C (+ B2B) Ch. 5: Implementation and controlling in the Marketing Planning Process Case study: Alfred Ritter GmbH The German chocolate maker of Ritter Sport is considering new customers in international markets Germany World B2C (+ B2B) Table 1.1: Overview of case studies Titelei.indd IX 03.08.2010 12:44:47 Uhr PrefaceX Throughout the writing period there has only been one constant in our lives – our families. Without them, nothing would have been possible. Thus Professor Svend Hollensen and Professor Marc Opresnik dedicate this book to their families. Svend Hollensen Marc Opresnik University of Southern Denmark Fachhochschule Lübeck Chapters Exhibit titles/subtitles Headquarters in following country/area Geographical target area in the case/ Target market (B-t-B, B-t-C or both) Ch. 1: Fundamentals of Relationship Marketing Exhibit 1.1: Nila Halter – From a model to an entrepreneur – selling N´oats Porridge Germany Germany/Europa B2C Ch. 2: Situational analysis in the Marketing Planning Process Exhibit 2.1: SWOT-analysis of Deichmann Germany UK/World B2C Ch. 3: Strategy formulation in the Marketing Planning Process Exhibit 3.1: Segmentation of Triumph lingerie Germany World B2C (+ B2B) Ch. 4: Marketing mix in the Marketing Planning Process Exhibit 4.1: Kofola – the regional ‘cola’ drink is challenging the big multinationals Czech Republic Eastern Europe B2C (+ B2B) Ch. 5: Implementation and controlling in the Marketing Planning Process Exhibit 5.1: Miele – entering the Indian high-end residential appliance market Germany India B2C (+ B2B) Table 1.2: Overview of exhibits Titelei.indd X 03.08.2010 12:44:47 Uhr Brief contents XI Brief contents Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V Detailed contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII 1. Fundamentals of Relationship Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Situational Analysis in the Marketing Planning Process . . . . . . . . . . . . . . . . . . 43 3. Strategy Formulation in the Marketing Planning Process . . . . . . . . . . . . . . . . . 109 4. Marketing Mix in the MarketingPlanning Process . . . . . . . . . . . . . . . . . . . . . . . 171 5. Implementation and Controlling in the Marketing Planning Process. . . . . . . 345 About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 Titelei.indd XI 03.08.2010 12:44:47 Uhr Detailed contents XIII Detailed contents Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 1. Fundamentals of Relationship Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 The Evolution of Relationship Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Definition of Relationship Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.3 Relationship Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1.4 Relationship Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.5 Relationship Marketing as an Integrative Management Approach. . . . . . . . . . 17 1.6 Fundamentals of Marketing Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Case 1: Nordex AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 2. Situational Analysis in the Marketing Planning Process . . . . . . . . . . . . . . . . . . 43 2.1 Assessing the Internal Marketing Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 2.1.1 Internal Relationships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 2.1.2 Market Orientation View (MOV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 2.1.3 Resource Based View (RBV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.1.4 Major Sources of Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 2.2 Assessing the External Marketing Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 2.2.1 PEST Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 2.2.2 External Relationships to Stakeholders in the Value Net . . . . . . . . . . . . . . . . 67 2.2.2.1 Relationships with Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 2.2.2.2 Relationships with Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 2.2.2.3 Relationships with Partners/Complementors. . . . . . . . . . . . . . . . . . . . . . 72 2.2.2.4 Relationships with Competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 2.2.2.5 Other External Relationships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 2.3 Analyzing Buying Behaviour on the B2C Market. . . . . . . . . . . . . . . . . . . . . . . . . 74 2.4 Analyzing Buying Behaviour on the B2B Market. . . . . . . . . . . . . . . . . . . . . . . . . 70 2.5 Comparing B2B and B2C Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 2.6 SWOT Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 2.6.1 Elements of a SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 2.6.2 Matching and Converging in the SWOT Matrix . . . . . . . . . . . . . . . . . . . . . . 84 2.6.3 Application of the SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 2.6.4 Required Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 2.6.5 Benefits and Barriers for Conducting a SWOT Analysis. . . . . . . . . . . . . . . . 87 2.6.6 Multilevel SWOT Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Case 2: BMW Motorcycles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 3. Strategy Formulation in the Marketing Planning Process . . . . . . . . . . . . . . . . . 109 3.1 Strategic Marketing Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 3.1.1 Vision and Mission Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 3.1.2 Strategic Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 3.1.3 Estimation of the Planning Gap and Problem Diagnosis . . . . . . . . . . . . . . . 114 3.1.4 The Search for Strategy Alternatives for Closing Planning Gap . . . . . . . . . 116 3.1.5 Ansoff’s Generic Strategies for Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 3.1.6 Porter’s Three Generic Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 3.1.7 The BCG Portfolio Matrix Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 3.1.8 The GE-Matrix Multifactor Portfolio Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Titelei.indd XIII 03.08.2010 12:44:47 Uhr Detailed contentsXIV 3.1.9 A New Product Portfolio Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 3.1.10 Strategy Evaluation and Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 3.1.11 Estimating Financial Consequences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 3.2 Market Segmentation, Targeting and Positioning . . . . . . . . . . . . . . . . . . . . . . . . 135 3.2.1 The Benefits and Underlying Premises of Market Segmentation . . . . . . . . 135 3.2.2 The Segmentation, Targeting and Positioning Approach . . . . . . . . . . . . . . . 136 3.2.3 Segmenting Consumer Markets (B2C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 3.2.4 Segmenting the Business Markets (B2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 3.2.5 Segmenting International Markets and Countries. . . . . . . . . . . . . . . . . . . . . 154 3.2.6 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 3.2.7 Positioning Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 3.2.8 Difficulties of Implementing Segmentation in the Organization . . . . . . . . 161 Case 3: Royal Copenhagen A/S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 4. Marketing Mix in the Marketing Planning Process . . . . . . . . . . . . . . . . . . . . . . . 171 4.1 Product and Service Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 4.1.1 Different Product Levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 4.1.2 Product and Service Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 4.1.3 Services Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 4.1.4 New Product Development (NPD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 4.1.5 The Product Life Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 4.1.6 New Products for the International Market . . . . . . . . . . . . . . . . . . . . . . . . . . 194 4.1.7 Branding Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 4.2 Pricing Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 4.2.1 A Pricing Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 4.2.2 General Pricing Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 4.2.2.1 Cost-Based Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 4.2.2.2 Value-Based Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 4.2.2.3 Competition-Based Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 4.2.3 Pricing Services vs. Physical Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 4.2.4 Pricing new Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 4.2.5 Price Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 4.2.6 Experience Curve Pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 4.2.7 Product Line Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 4.2.8 Price Bundling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 4.2.9 Segmented Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 4.2.10 International Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 4.2.11 Relationship Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 4.3 Distribution Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 4.3.1 The Role of the Intermediary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 4.3.2 Types of Distribution Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236 4.3.3 International Market Entry Modes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236 4.3.4 Designing and Managing the Channel Structure . . . . . . . . . . . . . . . . . . . . . 240 4.3.5 Distributor Portfolio Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 4.3.6 Developing and Managing Relationships between Manufacturer and Distributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 4.3.7 Vertical Integration in the Distribution Channel . . . . . . . . . . . . . . . . . . . . . . 253 4.3.8 International Distribution Channel Design . . . . . . . . . . . . . . . . . . . . . . . . . . 256 4.3.9 Multichannel Distribution Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 Titelei.indd XIV 03.08.2010 12:44:47 Uhr Detailed contents XV 4.3.10 Marketing Logistics and Supply Chain Management. . . . . . . . . . . . . . . . . . 264 4.3.11 Retailing and Wholesaling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 4.4 Communication Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 4.4.1 The Communication Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 4.4.2 The Promotional Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275 4.4.3 Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 4.4.3.1 Theories of how Advertising Works. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 4.4.3.2 Developing an Advertising Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 4.4.3.3 Standardization or Adaptation of Global Advertising . . . . . . . . . . . . . . 288 4.4.4 Sales Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 4.4.4.1 Major Sales Promotion Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 4.4.4.2 Developing the Sales Promotion Program. . . . . . . . . . . . . . . . . . . . . . . . . 292 4.4.5 Public Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 4.4.6 Sponsorship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293 4.4.7 Internet Advertising/Promotion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 4.4.8 Direct Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 4.4.8.1 Database Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 4.4.8.2 Major Direct Marketing Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 4.4.9 Personal Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 4.4.9.1 Sales Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 4.4.9.2 The Personal Selling Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 4.4.9.3 Personal Selling and Customer Relationship Management . . . . . . . . . . 318 4.4.10 Product Placement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 4.4.11 Push and Pull Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 4.4.12 Multi-Channel Customer Management (MCCM) . . . . . . . . . . . . . . . . . . . . . 321 4.4.12.1 Drivers of Multi-Channel Customer Management . . . . . . . . . . . . . . . . . 322 4.4.12.2 Benefits and Problems with Multi-Channel Customer Management . . 324 4.4.12.3 Managing Multi-Channel Customer Management . . . . . . . . . . . . . . . . . 325 4.4.13 Factors Affecting International Promotion Strategies . . . . . . . . . . . . . . . . . . 327 Case 4: Heinrich Deichmann GmbH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 5. Implementation and Controlling in the Marketing Planning Process . . . . . . . 345 5.1 Organizing and Implementing the Marketing Plan. . . . . . . . . . . . . . . . . . . . . . . 346 5.1.1 The Process of Developing the International Marketing Plan . . . . . . . . . . . 346 5.1.2 Deciding on the International Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . 346 5.1.3 E-Marketing and its Effect on the International Marketing Mix . . . . . . . . . 349 5.1.4 Writing the International Marketing Plan Document . . . . . . . . . . . . . . . . . . 353 5.1.5 Implementation and the Management of Change . . . . . . . . . . . . . . . . . . . . . 358 5.1.6 Barriers Impeding the Implementation of Marketing Plans . . . . . . . . . . . . 360 5.1.7 Deciding on the Global Marketing Organization . . . . . . . . . . . . . . . . . . . . . 365 5.1.8 The Role of Internal Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372 5.2 Budgeting and Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 5.2.1 Marketing Productivity and Economic Results . . . . . . . . . . . . . . . . . . . . . . . 375 5.2.1.1 Input Variables Influencing Marketing Productivity . . . . . . . . . . . . . . . 377 5.2.1.2 Process Variables Influencing Marketing Productivity. . . . . . . . . . . . . . 378 5.2.1.3 Output Variables Influencing Marketing Productivity . . . . . . . . . . . . . . 378 5.2.2 Marketing Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 5.2.3 Controlling the Marketing Programme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 5.3 Ethical, Social and Environmental Aspects of Marketing Planning . . . . . . . . . 388 Titelei.indd XV 03.08.2010 12:44:47 Uhr Detailed contentsXVI 5.3.1 Marketing Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388 5.3.1.1 Ethical Issues in the Marketing Mix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389 5.3.1.2 Special Issues in Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 5.3.2 Social Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394 5.3.3 Green Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396 5.3.3.1 Levels of Green Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397 5.3.3.2 Environmental Issues in the Marketing Mix . . . . . . . . . . . . . . . . . . . . . . 398 5.3.4 Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400 5.3.4.1 The Nature of Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . 400 5.3.4.2 The Dimensions of Corporate Social Responsibility . . . . . . . . . . . . . . . . 403 5.4 Developing and Managing Customer Relationships . . . . . . . . . . . . . . . . . . . . . . 407 5.4.1 Loyalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 5.4.2 Satisfaction of Customers and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410 5.4.3 Customer Perception of Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 5.4.4 Customer Relationship Management (CRM) . . . . . . . . . . . . . . . . . . . . . . . . . 414 5.4.5 One-to-One Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 5.4.6 Global Account Management (GAM). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 5.4.7 Creating Long-Term Customer Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 5.4.8 Rethinking Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428 Case 5: Alfred Ritter GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432 About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 Titelei.indd XVI 03.08.2010 12:44:47 Uhr